Michaelth1, wiping the debt is a great idea if you are the one who can control the situation and pick up the assets for a low price.
But if you were a bond holder, would you sell to Vodafone or would you sell to the highest bidder?
I suspect the highest bidder.
Sprint might choose to bid higher than Vodafone. Hutchison might bid higher than both. Or NTT might blow the lot out of the water.
Check out the spectrum auction in Germany today. Already, the UK auction is starting to not look so hugely over-priced. The whining people like Mucho Mass and other apologists for the doomed VW40 [W-CDMA, DS-CDMA, 3G4P gangsters] wimper that the auctions are too expensive and the winners won't be able to afford to build a network!
What a joke. Imagine that. These bidders are allegedly hopeless and have no idea what to do but they have the financial backing to bid $40bn or so [maybe a lot more - we'll see] on spectrum. It is obvious that they have a plan and expect to make a lot of money on WWeb business.
They will have to use efficient spectrum management to do that. Therefore they will use CDMA by QUALCOMM and they will use it soon. They will not wait until 2004 or whenever the 3G4P parasites finally lumber into gear.
Anyway, back to Globalstar.
If some spectrum in Germany is worth that much, what is spectrum all around the world worth? Especially if the satellites are all up there, the gateways are built, the handsets are in production and there are some customers already.
Quite a bit I'd say.
Certainly a lot more than $5bn.
Vodafone has got a lock on Globalstar and they do NOT want the thing to go bust. If they lose their shareholding, exclusivity and gateways, they could have to pay a fortune to get it back again when bidding against Sprint, Worldcom and others.
They are enjoying much, much higher margins on Globalstar minutes than they are on terrestrial minutes. They are greedy pigs! They had better be careful.
China Telecom might buy the whole thing! They could sell the minutes cheap in China through fixed phones and undercut Vodafone's USA, Australian and other terrestrial minute prices. Vodafone would look really stupid.
NTT could finance China Telecom in a joint bid, with China Telecom taking on NTT's W-CDMA, just as an added bit of fun!
It would be nice to ditch the shareholders and bond holders and get some clean, excellent assets on the cheap. But it won't happen. The bids will be too high. The best way to buy the assets would be in a dilutive refinancing when the Globalstar LP back is against the wall.
While others are waiting for BK, get in first and grab the lot at distress prices. Most shareholders would be thrilled to escape with $30 a share now. They'll only get my shares by way of compulsory acquisition in a takeover. They can have them now for $200. Next year, they'll be $400! [assuming the service providers start moving minutes in revamped marketing plans].
Mqurice
PS: It would almost be nice to see bankrutpcy to see Vodafone lose their grip and Hutchison take over in Australia and start selling minutes cheap with the good quality QUALCOMM phones, with car kit etc. They could rip Vodafone to pieces with nationwide cheap coverage, 100% CDMA with WWeb coming on-line.
Vodafone will NOT want that to happen. So far, that's the way they are going.
Bernie might be saying to them, "Just give me a whole lot of money and I'll let you off your exclusivity timetable - I'll give you another 6 months to perform and NO, you can't have any more Globalstar LP shares". |
